The top brass in the South Australian government are being cautious about the plans by Belgian entrepreneur Guido Dumarey to take over the Holden plant in Adelaide. Photo: Nicolas Walker

Premier Jay Weatherill and his Minister for Manufacturing and Automotive Transformation Kyam Maher met Mr Dumarey and some of his executives on Thursday morning in the Premier's office in Adelaide to talk about Punch's plan to keep making cars at the Holden plant. It is earmarked for closure in 2017. The decision was announced by parent General Motors in late 2013, after then Prime Minister Tony Abbott and his Treasurer Joe Hockey demanded an end to taxpayer-funded industry assistance for car makers, which had been heavily subsidised for decades.

Mr Weatherill said on Wednesday there were "a lot of questions" to be overcome in the proposal and said he was taking a cautious approach. "There are a lot of boxes to tick."

After the meeting with Mr Dumarey on Thursday, Mr Weatherill let his Manufacturing Minister do the talking. Mr Dumarey didn't want to comment about the plans.

Hurdles to overcome

Mr Maher said after the meeting: "We will do what we can as a government to help Punch in their ambitions to continue making cars in South Australia. However, there are a number of hurdles that have to be overcome both with General Motors and with the state and federal government.

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"There is still a long, long way to go before this becomes a reality."

Mr Dumarey held talks in Canberra with federal Industry Minister Christopher Pyne, who has been championing the prospect of the Holden plant staying open in his home state.

Mr Dumarey's Punch Group bought a General Motors transmission factory in Strasbourg in France three years ago that had been scheduled to close under consolidation plans by the United States car giant, and has been able to expand employment numbers and keep it running, selling gearboxes to car firms including Audi and BMW. But he has also had business failures in the automotive industry. He wants to use the Holden Commodore framework to keep building cars for other companies under contract.

Mr Maher wouldn't divulge how much in public funding Mr Dumarey was seeking from the federal government's $800 million Automotive Transformation Scheme. Rival Ford is set to close its car-making plant in Melbourne in 2016, and Toyota is also shutting down in 2017.

Access to subsidies

There were a number of conditions, Mr Maher said, including access to federal subsidies.

"It will require funding from the federal government under the Automotive Transformation Scheme," he said. "It will require further negotiations with Holden about using their intellectual property and the site."

One of the big sticking points is cleaning up the large industrial site at Elizabeth, about 30 kilometres north of the Adelaide central business district.

"Certainly one of them is about site remediation," Mr Maher said.

He pointed to Mr Dumarey's track record in the Strasbourg factory revival as a positive.

"He has done this before. I think he's genuine but there are many, many hurdles to get over."

It would be unfair to build up false hopes for Holden workers, Mr Maher said.

"We are being cautious. We don't want to build up false hope, particularly for the workers, not just at Holden but the many more thousands of workers in the supply chain."

Punch and General Motors will need to come to an agreement over the use of intellectual property and the site remediation for the proposal to proceed.

Mr Dumarey also held talks with South Australian Liberal Party leader Steven Marshall on Thursday afternoon.